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Toronto Grace Health Centre on life support

The historic Toronto Grace Health Centre faces an uncertain future after the Salvation Army informed the provincial government it no longer wishes to own and operate the 119-bed downtown hospital, the Star has learned.

Late Tuesday, government health officials said they will put out a request for proposals for new owners and operators of the site by mid-February. The hospital, which specializes in palliative care, sits on a prime piece of real estate at the corner of Church and Bloor Sts.

The Toronto Grace Health Centre as it looks Jan. 26, 2010. The closing of the institution at Bloor and Church Sts. would be devastating to the area it serves, the chair of the hospital board says in a letter. (RICHARD LAUTENS / TORONTO STAR)

The Grace's board of directors wants to buy the facility from the Salvation Army to avoid closing the hospital or moving its services to a new location. The uncertainty puts some 270 jobs at risk and affects elderly patients in a city already short of palliative-care beds.

The Salvation Army, which at one point ran four hospitals in Ontario, has operated a Toronto facility since 1889. But the charity says it slowly has been getting out of the hospital business over the past decade.

"When we got into the health-care field, there was no universal health care and denominations played an enormous role in establishing hospitals," said Salvation Army Capt. John Murray.

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"Organizations change and evolve as well. We've played an important role in this. Now we are pouring ourselves into our core ministries."

In addition to palliative care, the Grace also offers complex continuing care, or long-term care, for people of all ages who are dependent on ventilators and need intensive-care living services because of traumatic accidents or illnesses. Staff, patients and families were told Tuesday of the Army's intention to leave the Grace.

Proposals to own and operate the facility will only be accepted from health groups inside Toronto, including the 18 large hospitals located in the downtown core, said Janine Hopkins, a spokesperson for the Toronto Central Local Health Integration Network (LHIN). The network controls health services in the city on behalf of the province.

"Our main concern is that those services are protected and continue to be available in the LHIN," she said.

The Salvation Army wants to see a takeover proposal in place by the spring, she added, but it could take about a year for the Army to leave.

"If the Grace's board wants to make a proposal, they are more than welcome," said Hopkins. "We want to look at all the options. That could include a group of hospitals buying the site at the Grace and delivering the services there, or it could mean delivering the services at another location within the LHIN."

The hospital is in Toronto Centre, the provincial riding in which health-care funding has already emerged as a key issue in the Feb. 4 by-election.

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The governing Liberals hope to hold onto the seat vacated by one-time health minister George Smitherman, who left his seat to run for mayor of Toronto.

Health Minister Deb Matthews told the Star Tuesday it is "vitally important" that the services the Grace provides are kept in the area.

"Now (the Salvation Army) has made it very clear they need a concrete plan by the 31st of March," Matthews said.

"We really want those services, ideally where they are located right now. We are working on how we can do that."

Hospitals are independent organizations. The Salvation Army appointed the Grace's board of directors, said Matthews, but the government provides the base funding for the hospital. This fiscal year, the Grace received almost $16.83 million.

"The Salvation Army worldwide is getting out of running hospitals," Matthews added. "My understanding is this is one of the last ones they operate. They want to get out and sell the land."

The closing of the Grace at Church and Bloor Sts. would be devastating to the urban area it serves, according to a letter obtained by the Star and written to the LHIN and Salvation Army officials by W. Morley Lemon, chair of the Grace board.

Lemon declined to be interviewed by the Star Tuesday.

"The Grace should not be forced to close or see its beds, health-care programs and services, patients, and dedicated staff severed from the community it serves," stated the letter dated Jan. 19, 2010.

The board wishes to purchase from the Salvation Army, at no cost to the ministry, the assets of the Grace, including its land and buildings, for fair market value.

"The board's proposal will secure the employment of the Grace's over 270 health care professionals and support staff who would otherwise be displaced or worse declared surplus if the Grace is forced to close," the letter said.

This is not the first time the fate of the health centre has been called into question.

In 1998, it was ordered to close by Progressive Conservative premier Mike Harris's provincial hospital restructuring committee – a group that closed and amalgamated hospitals throughout Ontario. The decision to close the Grace was reversed in 2001.

The Salvation Army opened a rescue home in 1889 and in 1905 turned it into a maternity hospital. It was moved to its current location in 1909.

At one point, the Army also operated three other Ontario hospitals –the Scarborough Grace, Ottawa Grace and Hôtel Dieu in Windsor.

Hospital funding woes in the wake of a record $24.7 billion Ontario deficit have become a key issue in the Toronto Centre by-election. As the province battles the deficit, hospitals are concerned their funding will be frozen or increased only by a maximum of 2 per cent for the next fiscal year, which begins in April.

On Monday, NDP candidate and street nurse Cathy Crowe revealed St. Michael's Hospital, also in the Toronto Centre riding, is postponing elective surgery and reducing office cleaning to save money.

Premier Dalton McGuinty warned Tuesday that the rate of increase in health funding will slow because of the sluggish economy, and defended hospitals that are postponing elective surgery to keep from going deeper into the red before the fiscal year ends.

"Nobody is spending more money as a percentage of their budget on health care than we are," he told reporters in Kitchener, where he visited a family health team clinic, noting that hospital budgets have gone up 42 per cent since the Liberals were elected in 2003.

"Health-care funding has gone up every year and it will go up next year," McGuinty added.

"What we've got to balance is not only the desire of our families to get the best possible health care, but also we've got to balance that off our ability to pay for that."

The Liberal candidate for the Toronto Centre vote is Glen Murray, the former mayor of Winnipeg. Murray's election would be a welcome boost to McGuinty's cabinet in the wake of several high-level departures, including Smitherman.

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